Sen. Frist: Right Now Iraq Needs Grants

This is a partial transcript of Special Report with Brit Hume, October 17, that has been edited for clarity.

Watch Special Report With Brit Hume weeknights at 6 p.m. ET

TONY SNOW, GUEST HOST: The United States Senate today passed an $87 billion (search) request or measure to provide aid for reconstruction and military operations in Iraq (search) and Afghanistan (search).

Joining us now to talk about it, Senate Majority Leader Bill Frist.

Senator Frist, the big controversy now focuses on $10 billion. Ten billion dollars your colleagues say ought to go for reconstruction of Iraq but in the form of loans to be paid off with oil revenues. You don't support that position.

Are you going to appoint to the House Senate conference, the group of people who are going to figure out what the final bill looks like, anybody who is on that side. That is, who oppose the president's request, and wanted loan money?

SEN. BILL FRIST, R-Tenn., MAJORITY LEADER: Tony, you're breaking up a little bit. You'll have to repeat the question, but I understand it's about the loan itself.

Three weeks ago the president of the United States asked the United States Congress for $87 billion for the Iraqi people, $65 billion of that for direct support of our military. Over the last week and a half in the United States Senate, we've had very good debate. And indeed, we are very pleased, a great win for the president in that a few…about an hour and a half ago, we passed $87 billion for the military in Iraq as well as reconstruction.

Ten billion dollars of that in the United States Senate is to be in loans. In the House of Representatives, it was not $10 billion in loans; it was all grants. I would have preferred it to be all grants. Now we'll go to the so-called conference and over the next five, six or seven days, we'll work out the differences between the loans versus grants.

SNOW: All right. Senator, I'm hoping you can hear me now.

FRIST: I can hear you.

SNOW: There were eight Republicans who voted for loans instead of grants. Will any of them be asked to join the conference committee, which will hammer out that final measure?

FRIST: You know, we have not yet appointed conferees. I can say that once we go to conference, we'll have appropriate representation from the Senate and from the House of Representatives. The outcome I can't predict yet. Again, very different, all grants in the House, and $10 billion in loans in the United States Senate.

At the end of the day, what is important it is that $87 billion will get to a safer environment in Iraq for our troops and reconstruction in Iraq. And $65 billion of that will be direct support for our troops in Iraq.

SNOW: But the president wants loan forgiveness from France, Russia, and others who did arm sales with Saddam Hussein and never got repaid. We want those nations to forgive the loans. How can we ask them to forgive the loans if we're going to be dumping another $10 billion of fresh loans on the people of Iraq?

FRIST: Well, you're correct. There are about $200 billion in loans on the Iraqi people right now. But remember, those loans by France, and Germany, and Russia, were made to a regime at the time, which was tyrannical, run by Saddam Hussein, one of the most oppressive regimes in the history of the world. Now we have a state there that is just developing now, a free and democratic state, sovereign in the sense that it's been freed recently by the American people.

Thus, what I would argue is that the old loans should be forgiven, should be forgiven, those loans to Saddam and…Saddam Hussein. There's no reason for the Iraqi people now to have that burden now of $200 billion of loans that Saddam Hussein had. As we look to the future, I would argue that right now, especially going to this Donors Conference next week, that the most appropriate thing to do is to give grants to the Iraqi people and to the military, to our reconstructive efforts there.

And at some time in the future when they're on their feet, no longer drowning, and then we can consider whether or not those loans in…those grants in the future should become loans.

SNOW: Senator, the United Nations Security Council (search) yesterday, unanimously approved a resolution that basically told us to go ahead and do a good job in Iraq. But afterward, all the nations that were signatories got up and said they didn't intend to send money or troops to Iraq. Was that essentially a meaningless resolution?

FRIST: No, absolutely not. I mean that resolution showed that the United States of America is reaching out, asking for the support and the participation of nations around the world. Even those nations who did not support our initiatives, did not support the coalition in going and fighting for the freedoms and democracy for the Iraqi people. We are reaching out. We are asking for that support.

Freedom and democracy in Iraq is important to the United States, yes, because of the war on terrorism, clearly for the Iraqi people who now can look forward to something they haven't seen in the last 20 or 25 years, a free Iraq. But also to the global community, from democracy and freedom throughout the world. Everybody should participate.

We reached out; they did respond 15 to 0 in the Security Council. We can go for it and go into the Donors Conference next week now with our commitment of $87 billion and ask others to come on board and to invest in this very important initiative of reconstruction in Iraq.

SNOW: Senator, 30 seconds. How do you respond to critics who say you're asking for money but you don't really have a detailed plan about how to spend it?

FRIST: Well, the plan is there. And I think the fact three weeks ago people said there's no way we're going to give $20 billion to Iraqi people for reconstruction, for electricity, for more. We're not doing it. Yet here we are three weeks later, and all the nay Sayers today, including 87 United States senators voted to give that money. It shows that people do understand we have a very specific plan, a plan for reconstruction, a plan that is consistent why we went to Iraq in the first place to support freedom and democracy throughout the world.

SNOW: All right. Senator Bill First -- Senate majority leader Bill Frist. Thanks for joining us.

Copy: Content and Programming Copyright 2003 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2003 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, Inc.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.